If you're a startup founder or small business owner, your primary focus will be on growing your product or service team first instead of HR, which can be costly. But is it possible to run a business without HR?
Having an HR person as one of the first hires can be an excellent move for building values and culture from the beginning, especially in today's market, where a company's culture might help candidates make up their minds about accepting your offer.
But as we all know, most new companies wait to hire their first HR employee until they are in the growth stage of the business life cycle. As a result, founders often wear multiple hats while handling basic human resources tasks without having no proper HR training. As you work long hours and struggle to get your business off the ground, hiring and onboarding, managing leave requests, and attendance are pushed to the back of your to-do lists, becoming a bottleneck and taking more time in the end.
If you feel like this post is about you, then don't worry. Your days will get easier because we have collected tools that will become your best friends before you decide to hire the first HR employee!
Choosing HR tech stack – basics
Define your needs
What's essential in choosing the right HR tools is defining your needs for your organization's current stage and where you want it to be in a few years. In addition, the tools you choose to help you achieve your goals.
Make sure your money goes into the features you need - list all the problems you already know you have.
And while choosing a whole human resources information system (HRIS) might be a tempting option, offering everything you might need in the future, we strongly believe in starting with more specialized tools. They offer you precisely what you need so you can quickly implement and use them as soon as you feel it's time. From our experience, you will last with those tools for years if you choose wisely.
Do your research
As you have probably noticed, there are a lot of different HR tools on the market, so make sure to find the ones that fit your specific needs. Also, focus on more than what Google says – ask your fellow entrepreneurs for recommendations, check out Capterra reviews, and see the product from inside using a free trial option. You can also see if the product you're interested in is being constantly developed by visiting "what's new" pages.
Create a budget
Investing in an HR tech stack is usually a long-term decision, and the costs will grow with your company. Therefore, it's always a good idea to check if you can switch off a subscription whenever you need or easily downgrade the number of employees or admin seats to pay less.
Prioritize the need for those tools so that you'll know how much you can save on HR tech in case of a tight budget. While doing some HR tasks might be downgraded to e-mails and spreadsheets, having a safe and well-organized space for HR documents or a system for tracking time off is one you want to keep for all time .
Be mindful of legal requirements
If you run a business, it's vital to remember legal requirements such as minimum wage laws, overtime rules, leave policies, etc., especially when hiring employees in different states/countries with various labor laws/regulations.
Ensure you (or your HR tools) are familiar with local labor laws to avoid accidentally running afoul of regulations or risking hefty fines from government agencies.
Your first HR tech stack
Once you figure out the basics, search for the right tools. And while sticking with Google Docs or Excel might seem like a great idea - it's free and easy to manage, there are plenty of reasons why you should choose a dedicated tool from the beginning.
We also created a company once, so we know what is necessary to keep your business running. Below you will find tools we can't live without, and it's also why we've decided to create Calamari.
While we're listing crucial features in each category, please remember that you should always look for compliance management, reporting and analytics, and integration with other systems.
A Leave Management System allows organizations to manage employee time-off, set up leave policies, and automate leave request approval. Some crucial features of the leave management system include:
- Employee self-service: The software should allow employees to request time off, view their leave balances, and check the status of their requests. This empowers employees to manage their own time off and reduces administrative burden.
- Automated approvals: The software should enable managers to approve or reject leave requests and automatically calculate and adjust leave balances accordingly. This streamlines the approval process and ensures accurate leave tracking.
- Types of leave: The software should be able to manage different kinds of leaves, such as vacation, sick leave, personal leave, and parental leave, and apply other leave policies and rules accordingly.
A good leave management system should help organizations manage employee leave requests and absences more efficiently while complying with labor laws and regulations. It should also provide employees with self-service capabilities to empower them to manage their time off.
Attendance & Time Tracking
If your organization needs to track the attendance and whereabouts of employees, the right tool allows HR managers to do it with ease. In addition, it helps users with time management, overtime tracking, and related process automation. While looking for this software, it's necessary to look for the following:
Time and attendance tracking: The software should allow employees to clock in and out, record breaks, and track time worked in real time. This can be done through various methods such as QR codes, iBeacons, and mobile or web-based clock-ins.
Customizable timesheets: The software should enable organizations to define fields, labels, and formats that align with their specific needs.
Real-time alerts: The software should provide real-time notifications and alerts to managers when employees are absent or late, enabling timely action to be taken.
This is why we've created our second module: Clock In/Clock Out – to help you manage your workforce more effectively and efficiently while staying compliant with labor laws and regulations.
Human resources (HR) document software is essential for managing and organizing HR-related paperwork, such as employee records, job descriptions, performance evaluations, and more. Some crucial features of HR document software include:
- Document storage and management: The software should allow you to store and manage all HR-related documents in a central repository. This makes it easy to access, share, and update records as needed.
- Security and privacy: The software should provide robust security measures, such as encryption and access controls, to protect sensitive HR information from unauthorized access.
- Workflow automation: The software should enable you to automate HR processes, such as onboarding, performance evaluations, and benefits enrollment, to streamline operations and improve efficiency.
With good HR document storage software, simplify HR-related paperwork, reduce administrative burden, and improve compliance and efficiency.
Payroll / Compensation Management
Payroll and compensation management is a critical aspect of HR, and it involves managing employee salaries, benefits, and other forms of compensation. Therefore, when selecting a payroll software, it's essential to consider the following features:
- Automated payroll processing: The software should automate the entire payroll process, from calculating paychecks to filing taxes, reducing the chances of errors and saving time.
- Compliance with labor laws and regulations: The software should ensure compliance with labor laws, tax regulations, and other legal requirements.
- Direct deposit: The software should offer direct deposit to employees' bank accounts, eliminating the need for paper checks and saving time and money.
An easy way to manage payroll is by hiring an accounting firm that will work with other tools for leave management and time tracking to address what needs to be done.
As your company grows, more tools might help you with recruitment (ATS), performance management, onboarding, or benefits management. Still, we wanted to focus on those crucial ones that are important to implement as soon as possible to avoid extended software onboarding in the future.
How to choose the right HR tool
When assessing HR software, it is crucial to consider several key aspects to ensure the solution meets the organization's needs.
Ease of use plays a significant role, as a user-friendly interface can streamline processes and save time for the HR team.
Equally important is the quality of customer service, which can significantly impact the overall experience and support during implementation and usage.
The software should also offer comprehensive features that cater to various HR functions, such as leave management, time & attendance tracking, or employee documentation.
Additionally, the value for money should be evaluated, ensuring the software delivers an optimal return on investment.
Finally, looking for HR software that offers a trial period and regular updates is beneficial, as these demonstrate the vendor's commitment to continuous improvement and adaptability to changing business needs.
We're focusing on all these five aspects here at Calamari as well – so why don't you try it? Start a free trial now, and see how you can save time & money and regain focus on what's important – your people and business.
Running a business without an HR department may seem impossible, but with the right HR tech stack, you can streamline your HR processes, save time, and stay compliant with labor laws and regulations. Remember to define your needs, do your research, create a budget, prioritize your HR tech tools, and be mindful of legal requirements. With the right HR tech stack, you can focus on growing your business while your HR processes run like clockwork.